How to transfer ownership of a home?
If you want to change the legal ownership of a property (legally known as transfer of equity) our solicitors can help. It is important that the implications of transferring your home are fully understood, so the advantages can be weighed against the disadvantages and you make the appropriate decision for you. Contact Our Transfer of Equity Solicitors in North Yorkshire
What is transfer of equity?
A transfer of equity is the process of adding or removing a person (or people) to or from the title of a home. This alters the ownership of the property and is what you need to do if you want to give your home away as a gift.
Do I need a solicitor for transfer of equity?
The individual being added to the deed must be represented by a solicitor, however the person who already holds the deed doesn’t have to. However, transferring ownership of a home can be a complicated process, so we would recommend both parties have their own solicitors to make the transition as smooth as possible.
Do you pay tax on transfer of equity?
You may need to pay tax on transfer of equity depending on who you are gifting your home to. Currently, no tax is charged on transfers to a spouse, civil partner, or charity. To transfer to anyone else, including your children, may involve tax depending on the value of the property. Our transfer of equity solicitors can provide tax planning advice before transferring your home. Get in touch with us using our contact form, or you can ring us in either York, Malton, Pickering, or Selby.
Capital gains tax
If you own your home and live there, no capital gains tax is payable when you transfer the ownership on any gain made on the original purchase or acquisition price. The person(s) you transfer your home to will acquire it at the current market value. There may be tax payable by them when they eventually dispose of the property and they should obtain independent legal advice on the implications.
Transfer of equity - insurance
Although you may give your home away, you may agree to be responsible for the buildings insurance and general maintenance. You might be quite happy with the responsibility, but what may seem straight forward in the early stages could cause problems later on if you cannot financially afford to continue these payments. To prevent any future problems, discuss and establish who is to pay for all major outgoings of the property. Although it is your home, if you no longer own it, you could be asked to pay rent by the owner(s). They may even sell the property and you could have no home.
If the person(s) you have transferred your home to were to become divorced or bankrupt, their ex-spouse or Trustee in bankruptcy could have a claim on your home and you could end up homeless. Consider if this is likely before transferring ownership of your home and ask questions to see if there is a real risk. Similar problems can arise if the person to whom you transfer your property dies before you do.
What happens to your will when you change deed names?
Once your home has been transferred out of your name, it will not form part of your estate when you die and will not disposed of in your Will. This may save on probate court fees and administrative costs on your estate when you die. It may however be added to the value of your estate for Inheritance Tax purposes. The person(s) to whom you transfer your home will need to make provision for your occupancy within their own Will.
Means tested state benefits
If you are in receipt of means tested state benefits, such as income support, and you give away an asset such as your home which appears to the Department of Works and Pensions (DWP) that you did so with the intention to reduce your assets so as to qualify for certain benefits, they may assess you as if you still own the asset.
Care home fees
One of the main reasons for giving away your home is to ensure that at least some of your estate passes to your beneficiaries, even if you have to move into a care home. However, whilst financial help to fund care home fees is available from local authorities, they will question who owns your home, why and the motives for transferring it out of your name.
If at a later date you apply for financial assistance from the DWP or local authority, depending on how much time has passed since the transfer and the reason for the transfer, the value of the asset may be ignored when assessing your entitlement to financial support.
You may find that the local authority deems you have “deliberately deprived yourself of that asset” in order to avoid paying care home fees and include the value of the asset as part orf your financial assessment. Your contribution would be based on you still owning the asset, despite the fact that you have given it away. Call our Transfer of Equity Solicitors for more advice on changing deed names and giving away your home.
There are ways in which a husband and wife can protect a share of their property against being used to fund care home fees. This involves the use of trusts in your Wills. This involves the use of trusts in your Wills and is something our transfer of equity solicitors can help you with.
For more information and advice on giving away your home, please contact a member of our Private Client team.
Contact Our Transfer of Equity Solicitors in York, Selby, Pickering and Malton today to discuss transferring ownership of your home and find out how we can help.
Contact Our Transfer of Equity Solicitors in York, Selby, Pickering and Malton today.